The 'emulator effect' of the Uruguay round on US regionalism

Fugazza, Marco and Robert-Nicoud, Frédéric
(2010)
The 'emulator effect' of the Uruguay round on US regionalism.
CEP Discussion Paper,
No. 973.
Centre for Economic Performance, London School of Economics and Political Science, London, UK.

Abstract

Using a detailed data set at the tariff line level, we find an emulator effect of multilateralism on subsequent regional trade agreements involving the US. We exploit the variation in the frequency with which the US has granted immediate duty free access (IDA) to its Free Trade Area partners across tariff lines. A key finding is that the US has granted IDA status especially on goods for which it had cut the multilateral MFN tariff during the Uruguay round the most. Thus, the Uruguay Round (multilateral) ‘concessions’ have emulated subsequent (preferential) trade liberalisation. We conclude from this that past liberalisation sows the seeds of future liberalisation and that multilateral and preferential trade agreements are dynamic complements.